Pakistan availed SBA, a long-term soft loan, in November 2008 to avoid any default and as per agreement with the IMF, an instalment was due in February 2012.
On February 24, the State Bank of Pakistan (SBP) issued an advice to the Federal Reserves Bank of New York for payment of dollars 399 million, in term of Special Drawing Rights (SDRs) calculated 258.4 million, to the IMF. Later, the amount was transferred into the IMF account successfully. This amount has been paid from the foreign currency reserves held by the SBP, sources said.
They said that payment made on Friday was alone a first instalment of principal amount, while interest on the SBA is already being paid by the central bank on a quarterly basis. Next interest payment will be paid in April this year, which is estimated to be some 24.5 million SDRs.
The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. Currently, US dollar is equivalent to about 1.55 SDR, however it changes continuously.
Syed Wasimuddin, SBP Chief Spokesman, has also confirmed payment of first installment to the IMF. "Yes, Pakistan on Friday has made first SBA payment as per schedule to the IMF", he said, adding Pakistan was already prepared and managed to made first payment on time to the IMF and there was no chance of late payment.
Sources said that during the current fiscal year the country has to pay a cumulative amount of dollars 1.525 billion including dollars 182.2 million of interest payment to IMF on account of different programmes. This amount in term of SDR calculated 987.3 million along with 117.9 million of interest payment.
According to SBA agreement with Fund, Pakistan has to pay totalled three installments worth dollars 908.4 million (587.9 SDR) to IMF on account of SBA during fiscal year 2012. One installment is due in third quarter and remaining two in the fourth quarter of current fiscal year.
The first installment of SBA programme worth dollars 399.3 million (258.4 million SDR) was due on Feb 24, the second installment worth dollars 399.3 million (258.4 million SDR) is due on May 25, and third installment of approximately dollars 110 million (71 million SDR) on June 29, 2012.
It may be mentioned here that Pakistan re-joined IMF programme in November 2008 to avoid default as the country's reserves were depleting gradually and reached less than dollars six billion level in October 2008, followed by higher current account deficit.
Out of totalled dollars 11.3 billion SBA programme, the country received about dollars 7.9 billion and failed to get the remaining dollars 3.4 billion due to suspension of IMF SBA due to delays in implementing fiscal reforms by Pakistani government.
The final tranche of the SBA loan is still pending with the IMF and unlikely to be disbursed because of policy issues on some reforms. As per agreement and repayment schedule agreed between Pakistan and IMF, the country will repay total dollars 7.6 billion to the IMF till the end of fiscal year 2014-15.
With an increase of dollar 0.8 billion the outstanding stocks of IMF loans have reached dollars 8.9 billion in fiscal year 2010-2011. However, the increase in IMF loans during last fiscal year was substantially lower than a raise of dollars 2.9 billion in the previous year (FY2010). IMF loans constitute only 14.9 percent of Pakistan's external debt and liabilities as of end FY11. In addition, the country's foreign reserves stood at dollars 16.645 billion including SBP's reserves of dollars 12.21 billion and reserves held by banks dollars 4.43 billion as on February 17, 2012. There is same fall expected in the country's foreign reserves because of IMF payment, sources said.
